Private equity majors Bain Capital and Cerberus Capital Management are said to be in the last stages of closing a deal with Adani Capital. Both PE investors have been scouting for acquisitions in the non-banking space since 2018 and are keen to take over companies operating in the non-banking space and hold majority control over the company. Sources say that both investors are willing to shell out a reasonable premium to acquire Adani Capital.
On June 18, businessline reported that the Adani group has put its non-banking finance arm for sale. Adani Capital, incorporated as a private limited company in 2016 is promoted by Gaurav Gupta, the company’s CEO, and Sagar Adani, nephew of the group’s Founder, Gautam Adani.
Also read: Adani’s go-to bankers at Barclays turn cautious after Hindenburg
It is gathered that the current promoters may retain a 15 – 20 per cent stake in the company post the sale for about two years, and also a seat on board. “If there is any requirement to pump in capital into the business, the existing promoters will also be expected to infuse money,” said a person aware of the matter.
Interestingly, Adani Capital doesn’t fall under Adani Enterprise Limited - the holding company for most of Adani group’s businesses. Adani Capital has been put on the block as the NBFC arm doesn’t form part of the group’s core business.
Also read: Adani group’s financials stronger, healthier than before: Gautam Adani
Also, being a capital-intensive business with much dependence on bank loans, the group did not find it lucrative to operate in the shadow banking sector in an elevated cost of funds situation, said a person aware of the matter.
While valuations are still under negotiations, the deal is expected to conclude at 1.5 – 2x price to book multiples. Adani Capital’s loan book stood at ₹2,690 crore in FY23 and lends to segments, such as farm equipment loans, commercial vehicle loans, business loans, and supply chain finance. Adani Housing Finance is a subsidiary of Adani Capital.